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Tax Rebate Would Be More Effective as a Bonus

Tax Rebate Mind Games


When I came across an article in yesterday's New York Times I swore I was having deja vu — until I realized I had a rebate chat with Citizen about the exact same concept last week! The research reported in the Times aligns exactly with our conversation and perhaps affects why some of us intend on sticking our (potential) rebate checks in the bank.

The research argues that to really increase consumer spending, the rebate checks should have been called "tax bonuses" instead. Even though it's coming from the same source, people are more likely to spend a bonus and save a rebate. A study was done where half of the participants were given $50 and told it was a bonus while the other half were told it was a rebate.

When unexpectedly contacted one week later, participants who got the rebate reported spending less than half of those who received the bonus. Do you think this study carries any weight with your own psychology?

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